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Finance Dictionary and Glossary of Investment Terms
inverted yield curve
An uncommon situation in which long-term interest rates have lower yields than short-term interest rates. This is often a sign that interest rates are expected to decline. also called negative yield curve.
Usually a chart showing long-term debt instruments that have lower yields than short-term debt instruments. It is sometimes referred to as a negative yield curve. Partial inversion is when only some of the short term treasuries (5 or 10 years) have yields higher than the 30 year ones.
When short-term interest rates are higher than long-term rates. Antithesis of positive yield curve.